Half of first-time mass market-brand lease customers do not pursue another lease from the same company when their lease term ends, according to the J.D. Power 2021 US End of Lease Satisfaction Study. That figure gets only slightly better for first-time lessees with maturing leases from premium brands at 57%, much lower than repeat lease customer rates.
The study indicates that winning a lease customer’s repeat business requires an investment that starts well before the lease matures – as much as 12 months before. Data shows that 72% of mass-market lessees and 68% of those with premium-brand leases will take another lease from the same brand – and most likely, the same dealer and sales professional – when their current lease expires.
Patrick Roosenberg is the director of automotive finance intelligence at J.D. Power. He says, “There is a formula for optimizing new-vehicle lease recapture and conquest strategies. With such a high percentage of returning customers leasing again, the key to retaining those customers along with first-time lease customers is delivering the right proactive messaging at the right time via the right channel. The more lenders, OEMs, and dealers can coordinate their communications to connect with customers at the right moments in their leasing journey, the more likely they will be to develop strong, long-term relationships.”
Lease customers are an audience that offers incredible potential. Unlike vehicle purchasers, lessees have a much easier time getting out of their lease simply by returning it at the dealership. That makes them somewhat of a captive audience, but one that can’t be taken for granted. It takes intentionality and work to earn their repeat business.
Keep them coming back for other reasons
To earn their loyalty and trust, find ways to get lease customers back in the door after they drive away from the showroom. Since top reasons for a lease are for low maintenance cost and convenience, it would be beneficial to make pre-paid maintenance part of the lease payment.
Nothing irritates a lease customer more than being charged wear and tear at the lease return except for being sold brakes and tires within the last year of their lease – a time frame where any financial investment appears to have no reward. Emphasize the benefits of pre-paid maintenance in the F&I office which keeps them coming back to the dealership, establishing a trusted team.
Develop lease-specific email campaigns
Sending your lease customers the same marketing content as potential buyers or third-year financing customers does not capitalize on the captive market. Even first-time lessees know when their lease will expire, and the final year offers opportunities to bring them along in their next vehicle choice. Marketing materials should be developed specifically for a lease return sales funnel and their high-intent nature.
Optimize your lease return process
According to the J.D. Power study, Honda Hyundai, and Toyota have the best-ranked end-of-lease practices as reported by their customers. The process of returning a lease should be as easy as possible to retain lessees, but it has to be accurately reflected also. Well ahead of lease expiry, let your customers know a step-by-step process to returning their current lease and selecting a new one, making the assumption they’re leasing again. Be clear so they aren’t frustrated that it takes much longer or is more intrusive than they think it should be.
Lease customers are a prized resource and should be treated with just as much regard as a finance customer. And if they aren’t buying or leasing their next vehicle from your dealership, they’re certainly finding it elsewhere and you lose out. If a first-time lessee is treated right, there’s a great chance your dealership can exceed the national ratings in this report.
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